Arm China finally replaced renegade CEO Allen Wu nearly two years after Wu was fired by the company’s board. How did he stay so long, you ask? He bore the stamp of the company’s seal, called a ‘chop’ – a centuries-old business practice compared to a more formal signature in the West – giving him the ability to effectively ignore what he was told by the board and continue doing what he was told. I wanted. appreciated.
Arm China is actually a joint venture between Arm, the UK-based chip designer owned by Japanese firm Softbank, and a Chinese investment firm called Hopu. Arm Ltd only has a minority stake, but its involvement is critical as one of the world’s top chip designers.
Arm China board wanted to fire Wu after concerns about conflicts of interest, which Wu still denies. The board technically fired Wu over these allegations in June 2020, actually, but Wu denied that he was fired too.
Wu even tried to fire his board-appointed replacements and reportedly installed his own security team at the company’s Shanghai offices to keep out Arm and Hopu representatives. announced its independence from Arm entirelyand even set up its own R&D department.
In the eyes of the powers that be in China’s Shenzhen region – a sprawling tech hub – Wu was Arm’s legal representative, and there wasn’t much that could be done while the company was in his possession and he retained the ability to sign legal documents. like Arm China.
However, this two-year facade may well be over. Arm China, with the help of local authorities, has successfully replaced Wu with co-CEOs Liu Renchen and Eric Chen, it says in a statement. Clearly, two CEOs are safer than one if someone has ideas above their position.
The Shenzhen local government also accepted Liu as the company’s legal representative. This means that unlike the first time Wu was fired, a new company must be created and Wu will no longer be able to legally circumvent the board’s wishes.
“Arm China is in the process of resolving its long-standing corporate governance issue, and its Board of Directors has unanimously voted to name Liu Renchen and Eric Chen as co-CEOs of Arm China,” the company said in a statement (via Nikkei Asia). “Mr. Liu was also duly registered and accepted by the Shenzhen local government authorities as the legal representative and general manager of the company.”
The local area watchdog, the Shenzhen Market Regulation Administration, also updated the registration to reflect Liu as Arm China’s new legal representative (via Bloomberg), so Wu’s expulsion seems complete.
During the two tumultuous years of this joint venture, Nvidia tried, and failed, to buy Arm from its Softbank owners. Now, Softbank is looking to take the company public, with an IPO likely to launch in the US in the near future. Arm China was a thorn in the side of any IPO the company could have launched, as it likely was for Nvidia during its takeover attempt, and I’m sure the Japanese parent company will be happy to have finally regained control.
Wu isn’t too happy about the dismissal and re-registration of the company in someone else’s name, as might be expected. There will likely be legal challenges, and Wu released a statement threatening something along these lines.
“This company has good reason to believe that there are serious legal flaws with the change in company registration that the Shenzhen Market Regulation Administration has handled,” Wu’s statement reads. “This company will defend its legal rights by legal means.”
Wu still refers to the ‘company’ as something he has control over, but it may not be long before he has to stop all that and try to get another job. Anyone looking for a new CEO?